KRUK REPORT: New appointments herald start of Ukraine’s political season

KRUK REPORT: New appointments herald start of Ukraine’s political season
Ihor Rainin, the new head of Ukraine's presidential administration.
By Kateryna Kruk in Kyiv September 7, 2016

The end of the summer holidays in Ukrainian politics was marked on August 29 when President Petro Poroshenko appointed a new head of the presidential administration, Ihor Rainin, who will replace Borys Lozhkin.

Rainin is a relatively unknown figure and his appointment caught many by surprise. The main candidates for this position were believed to be the two deputy heads of Poroshenko’s presidential administration: Vitaliy Kovalchuk, who is responsible for regional policy and represents the president in cabinet meetings; and Kostiantyn Yeliseev, responsible for foreign policy at the presidential administration.

Rainin was formerly head of the Kharkiv Region Administration, where, according to Poroshenko, “he proved himself as a talented state manager who turned an uneasy region close to the [Donbas] frontline into a role model for decentralization”. 

This appointment is interesting for several reasons. First of all, Rainin has proved to be a good manager, yet he has kept a low political profile. So far he doesn’t have the political weight to be able to negotiate with oligarchs on behalf of the presidential administration, for which his predecessor Lozhkin was well known. Second, he has served only a brief three months’ stint in the presidential administration, which indicates that his appointment means Poroshenko has some new plans for his secretariat.

Many point out that Rainin’s appointment could be the beginning of a transformation for the presidential administration from a heavily politicized institution into a politically well-managed and obedient bureaucratic apparatus – a tool for Poroshenko to use, for example, to prepare for his re-election in two years.

The big challenge that the president and his administration currently face is dealing with the Minsk II peace process to halt the war in the east of the country and the future of the Normandy format, which is a diplomatic grouping of senior representatives of the four countries (Germany, Russia, Ukraine and France) tasked with resolving the situation in the east.

After Vladimir Putin accused Ukraine of being responsible for provocations in the annexed Ukrainian territory of Crimea in August, the Russian president announced his government would no longer participate in any further Normandy format talks. Now the big question is what will happen next to the mechanisms designed to resolve the conflict in the east and whether Russia’s decision will have any repercussions on the fulfillment of the Minsk II peace agreements.

Health of the nation

The last week of summer was also rich with other governmental appointments – and, I must admit, some rather shockingly positive ones.

Ukraine’s health ministry, one of the most corrupt and poorly run (many of the previous deputy ministers were either owners of or closely associated with pharmaceutical companies), has a new minister with a very promising team. Ulyana Suprun, a Canadian of Ukrainian descent, who famously volunteered to organize medical supplies for soldiers fighting in the east, has already proved to be a tough and resolute player. Faced with the reality of running a ministry staffed with the old team of deputy ministers, she sent Poroshenko and Prime Minister Volodymyr Groysman a clear ultimatum: she would only head the ministry on her own terms. And she won. Among others, she has invited on to her team an activist involved in the organization of the Euromaidan medical services, a doctor who served in the anti-terror operations in the east, and young professionals who don’t have any ties to pharmaceutical companies. 

The health ministry team is one of the best in the government of PM Groysman, who has named reform of health care as one of his key priorities. Yet the challenges it will face are hard to overestimate: the ministry is one of the least reformed state organs, which in previous years was little more than a lobbying centre for the pharmaceutical industry. The implementation of drug procurement legislation is one of the very first, and yet very hard, steps needed to break the corrupt ties between the ministry and business.

Visas and money

Autumn will be a challenging period for the entire government, not only for the newly established team at the health ministry. There are two big issues on the agenda. 

First is completing the visa-free regime negotiations with the EU. A final decision is expected to be made in the coming months, if not weeks. Ukraine has fulfilled all the requirements of the European Commission, so the issue is now being reviewed in the European Parliament.

With only one parliamentary committee left to give its opinion, it is very likely that the issue soon will be sent to the European Council for a final decision. However, as no clear deadline has been set, Ukrainians fear the decision will be postponed indefinitely. There is little appetite in Brussels for eastern issues after Brexit, and concerns over granting visa-free travel to Ukraine as well as other states like Georgia have been raised several times already. Some point to the lack of progress in combating corruption in Ukraine as a reason to delay it further.

Such voices are particularly enervating for the Ukrainian authorities, who feel they have fulfilled all the EU’s requirements and promised its citizens progress on this issue, yet may now seen it fall victim to European indecisiveness if a new and unquantifiable list of requirements is introduced. Ukrainian diplomats have little time left to convince their European counterparts it’s time to lift visa restrictions, and by doing so grant a huge reward to the euro-optimist nation and its European aspirations.

Another big issue on the government’s agenda is the delayed tranche of money from the International Monetary Fund’s $17bn stand-by agreement. Both Oleksandr Danulyuk, Ukraine’s minister of finance, and the IMF representatives are in close touch and, as reported by Danylyuk, the final decision will be made in the coming days. At the same time, the IMF says some technical issues regarding the timing of future actions by Ukraine’s government are still being discussed.

For the Ukrainian government, this next tranche of IMF money has become not only an economic issue, but also a political one. The delay in the release of this tranche is being used as a weapon in the opposition’s attacks on the government, as well as the decision to raise domestic gas tariffs and the new energy market regulations (which have still to be passed by the parliament) that were required by the IMF. Opposition leaders are already questioning why Ukraine must fulfill IMF requirements if there is no money from the IMF in return.

One of the biggest uncertainties of the new political season is whether the parliament, Verkhovna Rada, will get much work done. All the political parties in the Rada, except the ruling Petro Poroshenko Bloc and People’s Front, are seing their popularity ratings rise. Particularly, former prime minister Yulia Tymoshenko has reached a new peak in her popularity: in a recently published survey, she and her party was leading in both presidential and parliamentary polls. Combined with the rising support for the Opposition Bloc, the successor to the ousted president Viktor Yanukovych’s Party of Regions, these results speak volumes about the longevity of Ukrainians’ political memories.

Tymoshenko and her opposition partners showed at the start of summer that working constructively in parliament is not on their agenda. It is clear to everyone that these parties are seeking early parliamentary elections, which would considerably change the balance of power in the Rada. One of the most remarkable things about the current convocation is that there are many young politicians, former journalists, activists, volunteers and combatants who have fought in the east. They all became MPs in the post-Euromaidan wave of aggravated feeling of political responsibility. But the results of recent opinion polls suggest that if early parliamentary elections were to take place, they would return many of the old generation of politicians to the Rada.

The political ambitions of Tymoshenko, Radical Party leader Oleh Lyashko and leader of the Opposition Bloc Yuri Boyko are driven not only by high approval ratings, but also by an effort to engineer early elections.

The IMF required domestic gas tariffs to be considerably increased to stabilize the energy sector and end the so-called gas war with Russia. But these tariffs will become a hot political potato in the autumn as the weather starts to cool. The government needs the IMF money, so cutting the tariffs is not an option, but for Tymoshenko and her pals the tariffs provide the perfect platform on which to attack the government for “politics aimed against the interests of ordinary Ukrainians”.

Parliament has been unable to create a special commission to set the tariffs. The opposition was already blocking the presidium and organizing protests outside the Rada in June and July over the tariff issue. A new wave of even noisier protests can be expected in late October or early November when people start receiving the much higher heating bills.

Her high approval ratings coupled with more protests could easily block work in the government and force Poroshenko, Groysman and Parliamentary Speaker Andriy Parubiy to negotiate with Tymoshenko. The question remains as to whether she would even want to negotiate, or if she will keep pushing until her political ambitions are realized and there are fresh elections.

Activist, journalist and co-founder of Global Ukrainians, an international network of Ukrainians worldwide, Kateryna Kruk was awarded the Atlantic Council Freedom Award for her work communicating the Euromaidan revolution to the world. She predicted a frozen conflict in July 2014, which has largely come to pass, and now comments on the progress of crucial reforms in Ukraine.